Recently, I read a report from VanEck, and the performance of Bitcoin traders in the options market is really interesting. The buying of put options is unusually hot, indicating that everyone is preparing for a possible downturn. Data shows that the open interest ratio of put to call options has reached 0.84, the highest since June 2021, which was during China's strict crackdown on Bitcoin mining.

From the perspective of options premiums, the situation is even more evident. Traders have spent about $685 million on put options, while the premiums for call options have decreased by 12%. Relative to spot trading volume, the premium for put options has reached about 4 basis points, hitting a record high—three times higher than during the Terra/Luna collapse and Ethereum staking crisis in 2022. This essentially indicates that market sentiment is extremely cautious, with investors buying insurance against further losses.

But here’s an interesting point. VanEck’s data shows that such extreme options fear signals are often not the start of a new downturn but rather a turning point. Over the past six years, similar options skewness has been followed by Bitcoin rising an average of 13% over 90 days and 133% over 360 days. Meanwhile, leveraged speculative activity is cooling down, with financing rates dropping from 4.1% to 2.7%, and realized volatility decreasing from 80 to around 50, indicating that the market has become somewhat calmer.

Additionally, note that the WLFI token from World Liberty Financial recently hit a new low since its launch, dropping 12%. This project has sparked controversy due to its lending strategy on the Dolomite platform. They used their governance token as collateral to borrow stablecoins and cleared Dolomite’s $1 USD liquidity pool. Critics point out that this increases cyclical risk because a decline in WLFI’s price would weaken borrowing capacity, making collateral more fragile, which poses significant risks to Dolomite’s depositors.